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I am in need of assistance in completing requirments 1,2, and 3 in excel format.

1. For each depreciation method, prepare a depreciation schedule showing asset cost, depreciation expense, accumulated depreciation, and asset book value for each year of the asset’s life. For the units-of-production method, round depreciation per unit to three decimal places.

2. Azul Enterprises, Inc., prepares financial statements using the depreciation method that reports the highest income in the early years of asset use. For income tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year Azul Enterprises, Inc., uses the equipment. Identify the depreciation methods that meet Azul Enterprises’ objectives, assuming the income tax authorities permit the use of any method.

3. Show how Azul Enterprises, Inc., would report equipment on the December 31, 2015, balance sheet for each depreciation method.

Requirements

 

 

 

 

 

 

 

 

 

 

1. For each depreciation method, prepare a depreciation schedule showing asset cost, depreciation expense, accumulated depreciation, and asset book value for each year of the asset’s life. For the units-of-production method, round depreciation per unit to three decimal places.

2. Azul Enterprises, Inc., prepares financial statements using the depreciation method that reports the highest income in the early years of asset use. For income tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year Azul Enterprises, Inc., uses the equipment. Identify the depreciation methods that meet Azul Enterprises’ objectives, assuming the income tax authorities permit the use of any method.

3. Show how Azul Enterprises, Inc., would report equipment on the December 31, 2015, balance sheet for each depreciation method.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Req. 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-Line Depreciation Schedule

 

 

 

 

Depreciation for the Year

 

 

 

 

DATE

ASSET COST

DEPRECIATION         RATE     

DEPRECIABLE          COST     

DEPRECIATION EXPENSE

ACCUMULATED DEPRECIATION

BOOK

 

 

 

 

VALUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units-of-Production Depreciation Schedule

 

 

 

 

Depreciation for the Year

 

 

 

 

DATE

ASSET COST

DEPRECIATION

    PER UNIT  

NUMBER OF UNITS  

DEPRECIATION EXPENSE

ACCUMULATED DEPRECIATION

BOOK

 

 

 

 

VALUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Double-Declining-Balance Depreciation Schedule

 

 

 

 

Depreciation for the Year

 

 

 

 

DATE

ASSET COST

DDB DEPRECIATION

RATE   

BOOK VALUE

DEPRECIATION EXPENSE

ACCUMULATED DEPRECIATION

BOOK VALUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Req. 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Req. 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Method of depreciation

 

 

 

 

 

 

 

 

 

Straight-line

Units of Production

Declining Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                             

 

 

 

 

 

 

 

 

                   

18A. Capitalize long-term asset costs and several depreciation methods (Learning objectives 2, 3, 9) 20-25 min. on January 3, 2015, Azul Enterprises, Inc., paid $281,000 for equipment used in manufacturing automotive supplies. In addition to the basic purchase price, the company paid $700 transportation charges, $300 insurance for the equipment while in transit, $11,000 sales tax, and $2,000 for a special platform on which to place the equipment in the plant. Azul Enterprises, Inc., management estimates that the equip. will remain in service for five years and have a residual value of $35,000. The equipment will produce 60,000 units the first year, with annual production decreasing by 5,000 units during each of the next four years (i.e., 55,000 units in year 2, 50,000 depreciation so on for a total of 250,000 units). trying to decide which of method to use, Enterprises, Inc., requested a depreciation schedule the three depreciation methods (straight-line, units of production, and

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